Loosening Oil and Gas Regs Could Create 1.4m Jobs, API Says

A reversal of current policy could increase daily oil and natural gas production by 10 million barrels by 2030, while creating 1.4 million U.S. jobs and adding $800 billion to government revenue, according to a study sponsored by the American Petroleum Institute.

The report, U.S. Supply Forecast and Potential Jobs and Economic Impacts (2012-2030) [pdf] by energy consulting firm Wood Mackenzie, considered the effects of a regulatory environment that permits full development of the nation’s oil and gas resources, including those locked in shale formations. The policy scenario also included a repeal of a government ban on non-park federal onshore and offshore exploration and production, as well as reinstating exploration in the Gulf of Mexico to historical levels, and approving the Keystone XL and other pipelines.

U.S. oil and natural gas consumption would not necessarily increase as a result of these policy changes, according to API. The group says these policies would allow the U.S. to produce a much larger percentage of the oil and natural gas it consumes. “If the full potential of domestic oil and gas production could be achieved while also increasing imports of Canadian oil, all of America’s liquid fuels could come from secure North American sources within 15 years,” API President and CEO Jack Gerard said.

API represents more than 480 oil and natural gas companies that supply most of America’s energy.

What a bunch of PR. Matt, why do you so readily buy the results of this obviously biased study? This was funded by the American Petruleum Institute – hardly a sponsor that is likely to accept any results that do not support their own business interests. When you see that, don’t you at least stop to wonder how reliable it is?

The Pew Center On The States (http://www.pewcenteronthestates.org/uploadedFiles/Clean_Economy_Report_Web.pdf) says “the well-established traditional energy sector—including utilities, coal mining and oil and gas extraction, industries that have received significant government investment—comprised about 1.27 million workers in 2007”. Now the US produced over 8 million barrels of oil per day in 2007, and natural gas production in 2009 was 60 Bcf per day (equivalent to more than 10 million barrels of oil per day). So with a rough production of 18+ million barrels of oil equivalent per day, employment in the sector was less than 1.27 million. How can adding merely 10 million barrels per day lead to the creation of an additional 1.5 million jobs? The math just doesn’t work out. Simple linear scaling suggest the number would be closer to an extra 700,000 jobs – which is itself an overestimate, since the 1.27 million figure quoted above includes jobs in the utility and coal mining sectors.

The same Pew study indicates that by 2007, “more than 68,200 businesses across all 50 states and the District of Columbia accounted for about 770,000 jobs that achieve the double bottom line of economic growth and environmental sustainability”. More than half of those jobs were in conservation and pollution mitigation, but they further noted that “three other categories—Clean Energy, Energy Efficiency and Environmentally Friendly Production—are growing at a far faster clip. And about 80 percent of venture capital investments in 2008 were in the sectors of Clean Energy and Energy Efficiency: businesses and jobs working to develop clean, renewable energy sources such as wind and solar and products and services that reduce our overall energy consumption—all of which will help meet the demands of a carbon-constrained economy”.

Additionally, the Pew study notes that “between 1998 and 2007, clean energy economy jobs—a mix of white- and blue-collar positions, from scientists and engineers to electricians, machinists and teachers—grew by 9.1 percent, while total jobs grew by only 3.7 percent”. So the numbers suggest that job growth in this sector is far stronger than in the economy as a whole. As they further stated, “A clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution, and conserving water and other natural resources”.

And conclusions similar to the Pew results are echoed across many other studies, including ones done by the WorldWatch Institute, the American Solar Energy Society, the Union of Concerned Scientists, the Renewable and Appropriate Energy Laboratory, the IC2 Institute, and the American Council for an
Energy-Efficient Economy; to name just a few.

So the question becomes: do we want to see significant job growth by investment in clean energy and conservation; or do we prefer that some jobs come via a path that leads to continued reliance on fossil energy, with all the climate change, health costs, pollution, oil spills, and other negative effects; that come part and parcel with it? Is there even a debatable choice to be made?